According to new research by a broker intermediary organisation, over half of house-hunting Britons end up parting with more money than they intended to; confessing that they go ‘at least 10%’ over their original budget.
More than half of second-steppers have confessed they’d bought a house for ‘at least 10%’ more than they originally intended to spend, according to a new poll fromOnline Mortgage Advisor.
Of the 2,105 Brits surveyed – all of whom had purchased a property in the last twelve months – the majority said they felt influenced by their emotions over practical needs, resulting in a hike in spending, while others blamed their partners and even their children.
Initially, all respondents were asked: ‘Did you change or widen your original budget range, when first looking at properties?’ to which 64% of respondents stated that they did, with the majority of these (89%) stating that they took into account properties that were more expensive than they originally planned to.
All respondents were then asked how the house they bought fitted with their original budget, to which more than half (51%) stated that it was ‘at least 10%’ over their budget and 18% stated that it was ‘within 10%’ more than their budget. By comparison, just 13% stated that it was ‘exactly on budget’, 11% stated that it was ‘within 10%’ less than their original budget and the smallest amount of respondents (7%) stated that they bought a house for ‘more than 10%’ less than they originally set out to.
The respondents who had exceeded their intended budget were asked to share the reasons for the increase. When provided with a list of possible responses and told to select all that applied, the top five responses were as follows:
- I fell in love with a specific house and had to have it - 68%
- I wanted to pay extra for the right area/location - 47%
- My partner encouraged me to spend more - 33%
- We bought a bigger house as we felt it was better value for money- 25%
- My estate agent encouraged me to spend more - 29%
Further to these results, 6% of respondents stated pressure from their children contributed to an increase in spending.
Pete Mugleston, director of Online Mortgage Advisor, said:“Buying the right house within budget can be a really difficult task, especially in a growing market where property prices are still increasing in most parts of the UK. Often people will set out to buy based on price, but then check to see what they could get if “they just spent a bit more”. From then the decision becomes less about price and more emotionally driven, and often people will either come across their dream home or find it hard to go push the budget down again after seeing what they can purchase with a small increase.
“That said, it’s important people are realistic about what they can afford and to stick to it, factoring in potential changes in interest rates – they are low right now but will homeowners be able to afford mortgage payments if rates go up? Mortgage advisors should go through payments at different rates to help people plan ahead and ensure they aren’t overstretching.”
